After Citizens United: How Outside Spending Shapes American Democracy
75 Pages Posted: 17 Aug 2016 Last revised: 30 Apr 2018
Date Written: April 17, 2018
We study the political consequences of lifting bans on contributions from corporations and unions to groups engaging in outside spending (independent political advertising in elections). We propose a model of electoral competition in which outside spending changes the salience of candidate-specific attributes relative to party labels. Empirically, we employ a differences-in-differences design using federally mandated changes to state regulations following recent judicial rulings in Citizens United and FEC v. SpeechNow.org. We find strong evidence that removing bans on the funding of outside spending increases the electoral success of Republican candidates and leads to ideologically more conservative state legislatures. We do not find evidence of an effect on ideological polarization and targeted public good provision. We document that the effect of outside spending depends on the local balance of power between corporate and labor interests.
Keywords: Outside Spending, Citizens United, Interest Groups, Polarization
JEL Classification: D70, D72, D78
Suggested Citation: Suggested Citation